Advantages and Disadvantages of Term Life Insurance

 

Kabayan, term

Sa usaping insurance may mga interesado din sa term insurance. Alamin natin ano nga ba ang term insurance, ang advantages at disadvantages nito, at ng para sa ganon alam natin kung ano ang mas fit na insurance para sa atin.

 

What is Term life insurance?

Term life insurance provides protection for only a specified period of time – usually 10, 15, 20 or 30 years. There is no cash value associated with term life coverage, which is why premiums are often lower than for other types of insurance. Some term life policies may offer greater flexibility such as terms for return of premium and the potential to convert to whole life insurance.

<Source: https://www.us.hsbc.com/1/2/home/personal-banking/insurance/life-insurance/faq#faq_01_01)>

To simplify, this is a type of insurance that can protect you as you pay. Covered ka kung nababayaran mo ang premiums mo, kung hindi naman lapse na ito.

 

Advantages of Term life insurance

  1. Cheapest of all types of insurance because it doesn’t have any cash value attached to it.
  2. Best for tight budget or for those who wants to add life coverage at a minimum premium possible.
  3. You can decide when you want to get insured. For example, gusto mo ma insure ka lng ng 15 years while your kids are studying and you want to make sure na kahit may mangyari sayo, hindi ka mangangamba na hindi sila makapagtuloy ng pag-aaral because your death benefit will help sustain the financial loss. And when they graduated and you are still alive, and you decide you don’t need insurance anymore, then you have the option not to renew it.
  4. Pwede ka magsimula anytime and convert to whole or permanent life insurance in case you decide in the future or if budget permits.
  5. The charges are also at a minimum, no need to spend for fund management charges as there is no investment involved.

The above are just the common advantages I know about term life insurance. Looking at the above, I believe if you understand the value of life insurance, you will be able to consider including this on your budget as soon as possible.

 

While there are advantages, it is also best to know the disadvantages so you will have better judgment and decision.

Disadvantages of term life insurance

  1. The premiums paid are considered expense or gastos. Meaning, walang babalik sayo na pera at the end of the policy term.
  2. In case after the policy term, you decided that you still need insurance, the costs will be higher because you have already aged. Also, you may undergo medical examination in order to renew your policy.
  3. It is like renting a house, habang nagbabayad ka, may access ka sa house and pag natapos ang rental contract, you should leave and find a new house. Lahat ng rent payments are just gone.
  4. You will have to make sure you are in good health so that by the time it expires, madali pa din for you to get another term insurance if you wish to.

These are the common advantages and disadvantages I know. So if you are considering buying an insurance, check if this fits your needs.

Regards,

The Cristoba

PS. 1. For free term insurance proposal, please email us your full name and birthday at thecristobal@thecristobal.info.

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